Genius Network Presents: Brian Tracy, How To Build A Great Business

our presenter next is a dear friend of mine mr. Brian Tracy I've known him now for probably about 16 years over 16 years he's written a lot of books very amazing man knows a lot has helped millions people so I can tell you that Brian Tracy has sailed solo around the world in the 30-foot boat that he's climbed Mount Everest with no oxygen take that he won three Olympic gold medals but none of that is true what is true about Brian Tracy azita was the salt he was a soldier of fortune in Africa he ran for governor of California his company generates millions and millions of dollars and he spoken to over five million people in over 5,000 events and he's going to talk about how to build a great business this is one of his many books now build a great business that he did with Mark Thompson and so I want to give it up for my dear friend amazing speaker and great coach to so many millions people mr. Brian Tracy thank you jack thank you so much Parker Parker well thank you it's an honor to be here with you I like Joe like Joel I've dedicated my life to being a small and medium-sized entrepreneur and I've devoted the second half of my life to helping other people to be successful small and medium-sized business owners and Carl Schramm of the Marion and Ewing Kauffman Foundation the preeminent foundation on entrepreneurship quote an article in The Wall Street Journal two days ago and what he said was that there have been very few empirical studies into what actually makes and is a successful business that most of what is taught in the entrepreneurship faculties of the universities is nonsense in fact if you said that there's something at 1687 professors of entrepreneurship and their primary focus is drinking their own bathwater and telling that entrepreneurs have to start have a business plan and if you have a business plan you'll be successful and they spent two years in their faculties teaching people how to set business plans and 49 out of 50 businesses are started without a business plan including some of the most successful businesses in the world today so we are now just starting to learn what we really need to do to build successful businesses and what Joe is doing here is absolutely marvelous because it can save you years of hard work a hundreds even thousands of hours of hard work to understand how to do it much much faster to shortcut we say there's always a learning curve and anything and what we want to do is we'll jump the learning curve we don't want to spend years and years learning what we need to learn to reach a certain level of income and so I've majored now in the last few years on doing seminars and talking and books and articles and programs for owners and would-be owners of small and medium-sized businesses now I've got 45 minutes so I'm going to have to condense what sometimes I share in seminars for days but I understand you're some of the smartest people in the world so that you could take a lot of information in a short period of time is that true did anybody not understand the question so I'm going to try to bottom-line several of the concepts one of the first concepts which I thought was interesting was a little story that was in the papers recently Warren Buffett who was one of the richest men in the world and Bill Gates who is the richest man in the world and Bill Gates senior were at a dinner party and the three of them are good friends and they were talking and a gentleman came up to them and said you know I was looking at you and you gentlemen are very successful what would you say is the most important quality of success and all three cording to a bystander all three broke off their conversation and turned and simultaneously said focus focus is the most important requirement for success in our fast-moving world today if you can focus you can succeed and if you cannot you cannot it's almost a black and white thing well I thought that was interesting because the way Joe and I met as I put together a program some years ago called the focal point program which basically brought in business owners like yourselves and taught them to focus and we spent three years going through every single aspect of life get a tee two exercises that dealt with family and business and marketing a product and service and competition and positioning and it was focused focused focused and my offer which is not as good as Joe's but my offer was that you will double your income and double your time off within 12 months or there be no charge for this program and I never had to give a refund in fact many people doubled and tripled their income within 30 days just by learning to focus and just by thinking in terms of focus so it's really really important I read an article about myself it was a very successful entrepreneur in New Zealand and the article was sent to me last week I'm reading this article he said the turning point in his life was when he went to a Brian Tracy seminar and learn how to focus he was broke he was unemployed he had no money and he walked out of the seminar a completely different person and he had written goals he then looked around and as it happens he saw an article on coffee shops and Starbucks success in the United States and it said coffee shops are good business to be in because more and more people like the idea of a specialty coffee shop and if it has a Wi-Fi then they go there it becomes a social Center and so on he knew nothing about coffee and before the dust had settled he owned a tea coffee shops in Australia and New Zealand and then he says he got into a divorce and I had to sell it for 50 million dollars to share the proceeds with his wife but he didn't seed not share you not sell off the worldwide rights to it so he's rebuilding anyway his point was at the end of the article they say well what would you say to aspiring entrepreneurs who want to be successful and he said just two things he said focus and fail fast focus and fail fast learn quickly try something new and I thought I'd just passed that on because it's sort of what I have discovered over the years is the faster you fail and learn the faster you succeed you actually learn to succeed by failing you know Thomas J Watson 'he's famous line if you want to increase your rate of success you must double your rate of failure because success lies on the far side of failure well over the years I've done a good deal of reading and I came across a concept that I want to share with you and we were talking about this a little bit earlier and the concept is the question is what is the most valuable and highest paid work that you do it's a really interesting question because when I heard the question I didn't know what the answer was what do you think the highest paid and most valuable work is that you do and the answer is thinking thinking is the most valuable work now I am the best-selling author in the world and time management also on goals also on some other subjects but but I began studying time management about thirty years ago and I came across a word in my studies and the word was consequences and what it basically said is that something is important if it has big potential consequences and something is unimportant if it has low or no potential consequences number one reason for success is people focus on things that have high potential consequences number one reason for failure is people focus on things that have low or no potential consequences exactly what Joe was saying earlier the the famous Drucker quote very worst use of time is to work intently on something that need not be done at all and one of the things that is holding back entrepreneurs business owners it's killing them by the way and it's wiping out an entire generation it's this obsession with technology I see people that walking with their phone it's almost like drug addicts their main line they cannot stop staring at their screen they cannot stop pushing their buttons I hate to say there are people in this room that had that problem but the fact is that this obsession with looking at the screen and staying connected is killing people because it stops them from focusing you cannot focus if you are distracted like an attention deficit disorder dog so you're constantly ringing and responding to bells almost like a crazy person in a in a toy factory as and so so just as a quick aside if thinking is the most important thing you do because of the consequences of thinking determine the entire quality of your life then the quality of your thinking determines the quality of your life and so the more time that you spend thinking and thinking well and thinking clearly the more successful you are over the years I worked with some very powerful people billionaires and multi billionaires people who are on the Forbes 400 list repeatedly you over and over and I've had a chance to be with them during crises and what times where something was happening that was serious it was a major problem and I noticed that they all had one quality in common is they all went calm it's just they went call people around them or angry and upset and worried about what happened and who did it and so on and they would just go call almost like like like a pond would go gone and they knew and I learned later I didn't know why this was I admired it but didn't know why it was is that when your mind is calm you're tired cerebellum the thinking and deciding brain functions it at Heights level like turning up all the lights on a dimmer switch it's functioning like a Christmas tree but when you get upset and angry what happens is you're thinking reverts to your limbic or emotional system and your ability to think clearly diminishes dramatically and you make a lot of mistakes that's why when you are facing a difficult situation you have to use every skill trick game whatever it is stay call and that's why they teach you to meditate and they find that meditators in business are far more successful because they they can automatically trigger their mind into the calm of meditation when they're facing a crisis it enables them to think with greater clarity now a couple of years ago a man named Daniel Kahneman a very fine man from it from reading him I would want a nobel prize in psychology and neuroscience wrote a book called Thinking Fast and Slow and this book it was a very esoteric book and I don't recommend that you read it it's 500 pages of hard slogging I will give you the essence of that I will give you the essence I do the reading pass it on I will give you the essence of the book he said that there are two types of thinking there's fast thinking and slow thinking fast thinking is intuitive it's a distinctive it's automatic it's reactionary it's I think of it very much as how you would drive through busy traffic you're not giving a lot of thought you're just interacting he said the other type of thinking is slow thinking and slow thinking is where you just slow down the thinking and take time to think through issues now if an issue has little or no consequences then you can think quickly you know what do you have for lunch what do you pick up on your plate from the buffet where do you park your car these are the consequences of these decisions are almost non-existent but if it's a major issue then you say wait a minute this requires slow thinking here is his contention that made the book a best-seller is that the biggest problem that people have is that where they should use slow thinking they use fast thinking and entrepreneurs are extremely guilty of that as we make important decisions that have long potential consequences in Turkey including affecting the lives of people and costing money and even leading to the bankruptcy of a business we make those decisions with fast thinking when in reality we should be making them with slow thinking now I'm a great drucker fan as many people are and Mike was saying something about hiring the right people and hiring the right people to work with you is very important and the biggest mistakes you make is hiring fast you hire people quickly the best the best decisions you make are we really take your time to hire slowly and Peter Drucker said that fast people decisions are invariably wrong people decisions hiring an important person for important job has tremendous potential consequences so therefore you need to take a long time one of the things I teach which is in my book how to hire and keep the best people is a simple rule that will increase your hiring accuracy to 90 percent and I've taught it to Fortune 500 companies and they make it a rule within their companies to use Brian's rule is - this is you cannot hire except by doing this and I didn't invent it I just studied the hiring practices of the but he's that hire the best people and keep them the longest and they all at the beginning have a certain process that they follow and they follow it religiously no exceptions and so their accuracy in hiring goes up to 90% or better because they think more then the interesting professor at the University of San Diego last year wrote a book on sort of not sort of Thinking Fast and Slow but it was on decision making what he said is the longer that you take to make an important decision the better the decision will be the higher quality decision and Lord Acton once said when it is necessary when there's not necessary to decide it is necessary not to decide in other words he the professor said by as much time as you can for a decision put it off if you can put it off for a day a weekend a week a month put it off some of the best decisions that you make will be decisions that you allow to steep for a while like water and tea so thinking is the most important thing you do we call it Thinking Fast and Slow so remember anything that is important that has long-term consequences is a candidate for slow thinking discussing it with other people sitting quietly going for a walk letting it ruminate in your mind sleeping on it you know they say it's a big deal sleep on it my mentor the gentleman I told you about who owned 200 companies I would come to him with a business situation and he would nod he would absorb the information he had a what do they call it a liar trap mine he could hear something one said remembered forever he could read something once and remember it forever he was very smart and yet he would always say let me think about it for a few days and I would think well let's do this let's do that be nice it's obvious using fast thinking it's a no there are a lot of ramifications to something like this based on his experience let me think about it and after two or three days and I'd be very impatient he'd come back he said you know I've thought it over and I think we should approach it this way and then he would lay out based on his experience a plan of action that was genius and I go I mean I felt like like child it was I was like a child with him as many years older than me but because he took the time to think and combined it with his experience maybe he made a couple of phone calls to people who are more knowledgeable in that area and he would listen very carefully and then he would form a strategy and his strategy led to millions and tens of millions and hundreds of millions of dollars of business deal and I don't think he ever made a mistake in a business deal it was and over and over and over again he got into petrochemicals and built a 265 million dollar petrochemical plant that yielded 40 percent returns on his investment from the day it was finished and started operations and he knew nothing about petrochemicals except that somebody told this is a good business to get into and he said all right and he began to do his research and it's slow thinking now the second type of thinking comes from Edward Banfield Edward Banfield was a professor of sociology at the University of Harvard and one of the most brilliant teachers I spoken to people who studied under him and he's they said he's one of those teachers that you're never the same again after you studied under Banfield Banfield we had a focus on why it is that some people rise socioeconomically over the generations and other people do not he wrote a book called saying the unthinkable or I'm sorry he wrote a book called the unheavenly city and in the unheavenly city he pointed out that the difference between wealthy people and poor people is their the the the length of time which they take into consideration when they make a decision he said people who think short term almost invariably go for immediate gratification he said people who think long term think of all the ramifications very similar to Kahneman's work Thinking Fast and Slow so he called it long-term perspective and he said people with long-term perspective they think 5 and 10 years into the end of the future one of the marks of superior people is that they're long-term thinkers they make decisions very very carefully and with decisions that are long-term in their potential consequences they take a long time to make the decision days weeks they will buy all the time possible so you'll find that all successful people are long time perspective thinkers they think into the future and then they come back from the future like we talked about future or aunt Asia thinking about the future they come back from the future and they say what do I need to do today to create that ideal future when I do strategic planning for corporations it's a very interesting process the first thing I do is I have them say describe to me this company if it was perfect five years from now and I've done this with billion-dollar organizations with all the key people around a table like this this is the pattern that I use and I'll say imagine that a leading business publication Wall Street Journal Times our fortune Forbes was going to write an article in this company in five years and they were going to send out their best reporters to fan out over the country they're going to talk to customers and competitors and staff and people and suppliers and and they were going to come back and they say oMG oMG this is an incredible company this is fantastic of this is the best single company in its industry and they're going to write an absolutely glowing glowing story on your company five years from now the question is if that were going to happen what would you want them to say what would you want them to say and we go around the room and we say what would people say if this was the greatest company in the industry best products and service credible customer service fantastic IT great leadership best place to work finest working climate attractive the best place for people to get jobs at a credible marketing great selling very efficient high profit high stock price then we go around the room and it's almost like kids at Christmas what would you like for Christmas and every time I've done this what I do it in Russia with spare bank with a which has 22,000 branches and hundred sixty-five thousand people or in London with Prudential which has activities in 120 countries and seventy two billion dollars whatever it is we have this almost like kids and their write and write it down write it down write it down I use it on flip charts and I put it down and then at the end when nobody can think of anything else to say to describe this company if it was incredible I say now let me ask you a question we were settling down I say is this possible and there's always a stop and they look around at all these descriptions and they say yeah yes not in a month or a year but in five years we could have the best products at great leadership and fantastic customer service and great IT systems and beautiful sales and a protractor place to work and the best training programs and the best reputation in the industry and high stock pricing and go ahead and increase profits they go right everybody says these are all possible right I said well then let's organize them in sequence what is an input what is an output first input which we'll talk about in a couple of seconds is really great products and services so that's something we need to focus on because that's going to determine sales profitability and stock price so what are the inputs and what are the outputs and that's how we go around and create a strategic plan and then we just walk through what are the what are the operational steps that we'll need to take to achieve these this ideal description of this company sometime in the future and who is going to be responsible for each different area and how will we measure success in that area what will the schedule be and everybody walks out of the two or three days completely wired and and this process which I just explained you which all of you can use and you could even now probably teach it really works like a dam it is absolutely infallible I've had companies whose goal was to double their sales in the next five years and they increase their sales 500% and they called me up and they said you couldn't believe it our goal is to go from twenty million to forty million went to one hundred and five million in five years with with this stuff because now they're all thinking and they're all thinking with great clarity and they're all thinking long term and if we're forcing to think slowly through each of these key areas these are the individual building blocks of great business success so there's three thinking tools I want to give you and then seven ideas the first thinking tool which I start every single one of my MBA programs and I put together a three-day MBA for small and medium-sized business owners about four or five years ago when the economy hit the tank and companies were floundering for survival so I put three and I put two everything I've learned in my lifetime and put it together in a highly interactive program and called it the total business mastery the three-day MBA and then I realized over time a this is a great product I could sell this to promoters who could promote it one of my promoters in Iran sold it to a thousand people in three weeks at five to eight hundred dollars a person and made a fortune and so I could put it together as a two-day program so I created the 2-day MBA and then I realized that sometimes people cannot promote two days or they don't have two days so I created a one day MBA which I just gave in Dubai last week by the way to extraordinary success and it's just like an accordion you take the one day two day three day I'm here I'm going to be giving you the 30 minute MBA I'm going to compress it even more so the three ways of thinking which I start off the first way I start off every seminar is what I call zero based thinking and everybody who knows me for any period of time knows that I harp on this zero based thinking is comes from zero based accounting where you instead of increasing an expense in the next accounting period you ask should we be engaging in this expense at all now with zero based thinking you look at your entire world and you ask this question knowing what I now know is there anything that I am doing that I would not start up again today if I had to do it over this is one of the greatest thinking tools I've ever learned because in a time of turbulence you always have an answer for this question each person has an answer some people have multiple answers there's lots of things that they're doing today that knowing what they now know they wouldn't get into today they wouldn't start them up products they wouldn't offer people they wouldn't hire investments they wouldn't make and these are the greatest drags in life these are sort of like a sea anchor you know that you drop it and it drags it slows down the boat well how do you tell if you have a zero based thinking situation and many of you were asked to write your problems challenges opportunities the answer is stress is whenever you experience chronic stress it's something that buzzes around when Joe's talking or somebody else is talking you're busy thinking about that you drive around and you think about keeps you awake at night it's something that pisses you off it's something it irritates you and angers you and frustrates you whenever you have chronic which means ongoing continuous this is a candidate for zero based thinking so you ask yourself the question if I was not now in this situation knowing what I now know would I get into it again today if the answer is no the next question is how do I get out and how fast how do I get out and how fast if ever the answer comes back that I would not get into this again today it's too late to resolve it it's over the only question now is how long do you suffer how much how much emotional suffering how much financial suffering do you make before you walk and so the most important requirement for practicing zero based thinking which a lot of people don't like to practice is courage I call it the c-word you need the c-word you need to have the courage to look at every part of your life and say is there anything that I'm doing that knowing what I know no I wouldn't get into now the starting point of zero based thinking is always with your relationships and those are both personal and business whenever I given this talk by the way within a short period of time divorces take place all over that city people go home and say geez if I hadn't married this person I would never marry them again today and that's what's making me miserable and many people are working their heads off on the outside to achieve success but inside they're frustrated and unhappy because they're in a situation that knowing what they now know they would never get into so I call this a quick analysis and I'm going to ask you to do this for the rest of your life and do help other people do it k wi NK knowing what I now know do a quick analysis on everything do a quick analysis in my company what they say is we look at every single person and on a regular basis and we say if we had not hired this person and they walked in today to apply for their current job knowing what we now know would we hire them if the answer is no they're gone that day there's a little rule by the way that in one of my books it says the first the best time to fire a person is the first time it crosses your mind and because after that it's only pain and suffering and if you look the longer you keep them in place the more likely they are to sue and they longer they sue you the more it's going to cost so therefore if you if you find that you've made a mistake belly up to the bar have the courage to admit I made a mistake and cut your losses there was a great book by an author called the Zurich axioms some years ago and it was principles of success and anybody who's in Finance has probably read the book because a very successful New York financier and he was talking about the nomes of Zurich Zurich and whoever they are and the rules that they go by and he said the number one rule for success in in business personal lives cut your losses when you realize you made a mistake bad investment bad hire bad relationship cut your losses quickly what are they say in Las Vegas you know cut your losses that's your winnings right so in life that's what we do and the faster you cut your losses fail fast the faster you can start doing things that are much more productive the other the second area has to do with every part of your business Joe and I were talking about what I think is a revolutionary new field though it's not revolutionary and it's not new but its business model innovation and it's based on the concept that whatever business model you're using today is probably obsolete if you're in any kind of a business that uses technology to market it especially an information based business and knowledge based business consulting services training anything else chances are your business is obsolete the way that you and visit and the business model is your method your step-by-step process of generating profitability now there are some companies that struggle long struggle long struggle on then find a new business model and the next year their misses up five or ten times profits are just overwhelming they're living in big houses on the hill driving Cadillacs and flying private jets and you say what on earth did they do to change their business model and if you don't change your business model if it's the wrong business model two things are going to happen your competitors are going to come up with a new business model and each or lunch and or you're going to go broke so it doesn't mean that your business model is wrong it just means that you must be open to the possibility that your business model is obsolete and that just means that there is a better business model there's a superior business model and your job is to find it and again there's no fixed answer to it but I think that this is a great area of thought I think this is a great area it's sort of like a tool for you to have I wonder if I need to change my business model which is is your way of generating sales producing and delivering products and services getting payments and and achieving profitability well so coming back to the second is look at anything in your business look at your products look at your services look at your people look at the way that you advertise market and ask is there anything that you're doing today that knowing what you now know you wouldn't start up again today and the only question that you ever ask is does it work does it work does it work if it's not working and you and you could tweak it then that's fine if it's not working have the courage to admit this isn't working and abandon it Peter Drucker had a wonderful line he said if the investing public knew how many $10,000 a day mistakes are made by executives because of their egos he said there would be riots in the street he said there would be riots in the street because people fall in love with their ideas or with their product or with their service or with their previous decisions and they don't have the courage and the ego strength to admit I made a mistake it seemed like a great idea at the time here's a great question comes from American Management Association what percentage of your business decisions will turn out to be wrong in the fullness of time can you guess what percent will turn out to be wrong in the fullness of time about 70 percent the average is 70 percent of some people are even do real well they they're wrong 90% of the time sometimes 100 percent I would say no politics involved but there are senior people in our government who are wrong almost all the time their their wrongness is almost criminal and it's dragging the whole country down the drain because they hate business the people running our country hate business they think that business is evil that people who are in business are evil people and who should be and should be punished with taxes and regulation if it's not working just keep asking does it work does it work does she work now the third area has to do with investments in zero based thinking Smits of time which people hate to lose someone said earlier that people hate to lose it's one of the greatest emotions we hate to lose time if we invested a lot of time in a course of action a project a business a relationship the second is is emotion if we put a lot of emotion into a course of action a product of course of study a relationship or money we hate to admit that we made a mistake and that would seemed like a good idea at the time has turned out not to be a good idea and knowing what I now know I wouldn't get into it and have the courage to cut your losses and run the reason I teach this first is because you can't make any progress unless you clear the decks unless you get this 800-pound gorilla that's holding you back out of your life and then many companies that I've worked with literally transformed became multi-million dollar companies when everybody said all right we're going to go through and do a quick analysis on this whole company and realize that half the things that were doing and half the people working here are not the right people for us at this time and half the products that we're offering aren't selling and never will they've been replaced by better cheaper faster products in the marketplace so cut your loss what happens when a cup big big company gets into trouble they bring in a quick analysis man and he comes in with a chainsaw and he shuts down all the factories in all the stores that are not profitable and the company goes for profits the losses in one year anyway the second thinking tool that I teach people is WPO thinking which is worst possible outcome and everything that you're doing always ask yourself what is the worst possible outcome of this course of action and what and can I survive it if it were to occur and if not what could I do to make sure it doesn't happen if one of the number one reasons that we worry about anything in life is because of fear and when you ask yourself what is the worst thing that could happen in this particular situation and then if you could say alright if that happens I'll live with it then your worry goes away and your mind goes clear and calm and now you say now what could I make do to make sure that the worst does not happen and then you become proactive and you take charge of your life the third thinking - I hope I'm not going too fast for it the third thinking - is called the principle of strains and it's one of the most important thinking tools ever discovered it says between you and anything that you want to accomplish there is always a constraint a limiting factor or a choke point that sets the speed at which you accomplish your goal so I was just talking doing a teleconference and a few minutes ago so the question I said is let's always set the goal of doubling our income better double your income okay want to double your income then why isn't your income already twice as high now in business we don't think of doubling our income we think of doubling our profitability what we're concerned with is net cash flow we're going to concern with the amount that we take home to our family at the end of the day not the gross but the triple net so we say if I want to earn twice as much and everybody in here can and can and will earn two three four five times as much sometime in the future if I wonder twice as much why aren't I already earning twice as much and the number one reason for for most people is distraction so they're so distracted they're doing things of low or no consequences but we find the 80/20 rule applies to constraints eighty percent of the constraints that are holding you back from achieving your financial goals are within yourself and within your business they are not on the outside they are not the competition they're not the market they are not the people in Washington or the taxes of regulation 80 percent are within yourself so the mark of the superior person is whenever they have a problem they say what is it in me that's causing this problem Mike and I know this very very clearly what is it in me that's causing this problem in in illness by the way 85% of illness is psychosomatic as Denis Waitley said it's not what you're eating it's what's eating you it's causing the problem and so the starting point and the first thing a doctor will tell you or a psychologist is what is it that you're not dealing with and you go back to zero based thinking what is it that you have in your life that that if you had to do over you wouldn't do it so ask yourself what's holding you back and usually it's the quality of self discipline or it's a skill now one of the things that changed my life forever was when I learned that all business skills are learning you don't have to be a genius to learn business skill you can learn any form of technologies mike has proven that with with his products you can take a person who's basically shoveling shoe polish in Sheboygan and teach them how to be technologically sufficient superior and after living from it every business skill is learning and so I say what one skill if you are absolutely excellent at it in your business but help you the most to double your income what one business skill if you could wave a magic wand and wake up tomorrow morning superb in this area what skill would it be and you know when you ask that question everybody knows the answer they know what it is but here's the challenge you don't like the skill because it involves it rejection embarrassment ego potential failure loss you've tried it in the past you haven't been good at it but nobody asks you what would be an easy skill to learn they just asked you what skill would help you the most to double your income and here's what we have found is that most of us are only one skill away from doubling our income and all business skills are learn about and if you study the people who go from the top to the bottom in the fortune 500 or fortune 1000 they found in 25 years of research these people learn one skill at a time by climbing the ladder of success on the ladder of income like sniper one shot one kill they don't try to learn 50 skills they learn the one skill focus the most important skill and they get their company focusing on the one skill that can help you the most to generate sales and profitability so coming back to looking at my counter about ten minutes I talk about what I call the greats the seven greats in business the there and actually my three day seminar has the ten grades but the seven the seven greats in business I'll give you briefly first of all successful companies have great leadership and leadership is the ability to get results but it's also the ability to allocate resources which means it's the ability to make decisions and to make hard decisions because if it were easy decisions everybody to be a leader and everybody to be rich so making decisions using thinking slow thinking using long term thinking is the critical job of the leader Drucker says the first job of the leader is to ask what results are expected of me and then I add to that of all the results that are expected of you as a leader what is the most important result that you need to get to achieve the sales and profitability for which you are responsible one of the rules what we learn in business we never complain about anybody or anything in our business because we're the boss we're the ones who decided this you'll complain about your staff because you hire the person if you don't like the person get rid of them don't complain about them you just sound like an idiot hey you know it's it's it's like Orbitz I figured up food from the buffet down there and saying I don't like this food well I never have liked this food I've always hated this food well why did you pick it up well I don't know you know the fact is you never complain about something in your business if you're in charge of it if you don't like it change it if you don't want to change it shut up it's now which which allows me to jump actually forward is is one of the marks of superior entrepreneurs is they're intensely solution-oriented is whenever something goes wrong they immediately go calm and they say all right what's the solution what's our next action what mediocre people do is they say who did it and who's to blame how did this happen they go on a witch hunt and of course that makes them become angry and frustrated but superior executives when something goes wrong problem with a customer problem with money problem with bills problem with product delivery or defects they say okay alright how do we solve this what's the solution now here's a wonderful thing is your success in life will be determined by your ability to solve problems my friend : Paulo said leadership is the ability to solve problems success is the ability to solve problems and how do you become really excellent at problems um I just finished a book by the white called creativity and problem-solving that amacom is publishing in New York at the end of this year I guess because I did years of research on the subject here's the point is the way that you solve problems is simply to think about solutions what are all the possible solutions the intensely solution-oriented don't go allow yourself to get bogged down negative upset unhappy about the problem and who did it focus on the solution and the actions that you can take and when you start to think about the solutions remember Helen Keller's wonderful line when you turn toward the Sun the shadows fall behind you when your thoughts are thinking about solution could you this look at that and you could do this and I could do that we could do when you started thinking about solutions your mind goes calm your creativity turns on like lights you start to have more energy you start to feel more confident and so on are you with me so far thinking about problems makes you negative and shuts down your brain thinking about who's to blame is even worse but thinking about what you can do and the actions you can take put you back in charge well the second principle and I talked about the second the second great is having a great product or service and this to me was was it is a revelation and it's so simple it stares you in the face but 90% of your success will be in business will be to have a great product in the first place and this is something that many people miss they think if I have a good product and I when I pay thousands of dollars and go to really clever seminars they'll teach me some marketing gimmicks and tricks so I can con people into buying it and they spend enormous amounts of time and money trying to advertise or market what is a mediocre product and I had a good friend Mitch and Mitch owned three first-class restaurants and he did no advertising for the restaurants and the restaurants were always full and when people said where do you wanna go for dinner let's see if we can get into one of those restaurants and so I asked him I knew him very well because we worked in the same organization doctor Allard my mentor owned the three restaurants and and Mitch was a part owner and he ran them and he could just start an excellent restaurant I said what is your secret to promotion how come these restaurants are always full and he said we always put it on the plate I said how do you mean he said we put superb food at good prices on the plate and just stand back and the restaurants are full all seven days a week and I always thought that's the key to success in business put it on the plate put it on the plate put the quality put everything into the product or service now the ink magazine does a story on the Inc 500 the 500 fastest growing companies in America taken over a three year period and every year they updated the last edition which came out a couple of months ago was that the number one fastest-growing company was grew forty two thousand five hundred percent forty two thousand five hundred percent unbelievably grew so fast others grew five ten fifteen twenty thirty fifty times in two or three years all new companies are recently new companies all companies started by people like the people in this room and they grew five ten fifty twenty a hundred times Wow what was the key so they went back and they did had outside researchers analyzed it and you know what they found is all the companies put it on the plate is every one of them was obsessed with quality and obsessed with quality as their customers defined it and they were close to the customer they were they were locked tight to the customer as I was sharing his idea about what was it called what was your WT see what did you say about customers well Joel I think think I get customers sharing that on my conference they think like a customer the very best companies think like a customer what a customers want what a customers need and you know the key to success is make your customers happy and then make them happier than your competitors and then every single day wake up and think how can I make my customers happier and they went may interviewed the CEOs of the four of the five hundred fastest-growing companies that every one of them was obsessed with customers they thought about customers they talked about they visited customers they called customers they went and saw customers they personally responded to customer complaints they were just obsessed with it which again repeats that ninety percent of your success will be the quality of your product or service now how can you tell if you have a great product or service well it's a very simple test and this is the test that predicts your future more than any other test for the rest of your business career how often how many people after they have used your product or service turn to another person say gee sets a great product geez that's a great service geez that's a great company geez those are great people and I mean how many people say this is a great product what percentage fifty percent forty percent average in America is about thirty 35% top companies that companies like Apple that come up with an iPod and iPhone and an iPad people you consume the product the next time they come up with an iPhone they sleep on the sidewalks and rows of hundreds to be the first purchases they come up with an iPad they sleep hundreds are sleeping on the sidewalks to buy it and pay outrageous amounts and then they start showing everybody else isn't this a great product and then they have apps look at this look what you could do with this app how many people have an iPod five an iPhone five okay how many of you showed other people at the panoramic thing how you can take panoramic pictures isn't that a great concept you know it used to cost thousands of dollars to have panoramic cameras they could take a panorama and now you've got it in your iphone as one of a hundred or thousand different things you can do so people who buy their products become their preeminent sales people they're running around grabbing people and bothering them and showing them the product or bragging about the product in a movie by the way the movies companies only have enough advertising for the one weekend they could take big ads for one weekend to get people into the theater quickly after that the movie will either grow or die by word about and your movies that are successful by word of mouth everybody's target if you've seen that movie if you said you've got to see that movie honey I just heard about this movie at work let's go tonight you weren't even planning to go to a movie and you go there on Tuesday night the theater is full have you had this experience you see and everybody's talking about it the most important key to our success so go back to the ink study and I'm looking for corroboration in the ink study they did had researchers say what is the very best place for a company to invest if they want to increase their sales and profitability and the answer came back after looking at everything else is invest in improving the quality of your product invest in improving the quality of your product make the product better and better and better make your customers happier and happier make your customers so happy I say that the key to success is to get your customers to buy from you first rather than from your competitor to buy again because they are so happy and to bring their friends and if that becomes your operating theme we could talk about this all they is getting a buy from you buy again and tell their friends then you're going to be successful you're going to be wealthy you're going to be respected and more than anything else you're going to be just as happy as you can be is nothing gives us greater joy than to make our customers happy number one is is is become a great leader which means set clear goals be decisive take responsibility for results number two is offer a great product and never be satisfied with the quality of the product it's constantly strive to make it better in the eyes of your customers and here's one of the great revolutions in marketing which i think is so important is the very best companies the four stages of the Epiphany the the Lean Startup are going to their customers and saying how do you define a great product would you buy this would you pay for it what would you want more of what would you want less of what can we do to improve it you're even doing this with what they call the Minimum Viable Product idea is they take a product idea to a customer before they even make the product and they work with the customer shoulder to shoulder to develop the product so the customers is this is a great product then they produce and market the product so number three is you won't have a great business plan but a great business plan simply requires that you think through on paper the critical aspects of your business and especially you analyze what it's going to cost what you could sell it for what kind of profits you can make who are the people that you will need there's a there's a great story of Napoleon's generals all around this large table with maps of Europe spread out and this is when his the French armies were conquering everywhere and they're talking about what cities are what what municipality is what duchies that they were going to attack with the army next time and Napoleon would come in from his office which was nearby and he said what are you doing said we're talking about we're going to move the army from here we'll move it to there and so on and he'd say well gentlemen he said I'm afraid that we can't do it we don't have the horses and you've heard the expression we don't have the horses it comes from Napoleon and what he was saying was that the entire army was driven by horses cavalry and horses to pull the wagons with the supplies and everything else and they could get more men by recruiting on the march as they did they recruited as they went through a village they recruited people join the army see the world that sort of thing enjoin the arm you see the cannons but the horses those were scarce and so the whole success of the army was it was determined good to get the horses that's why when when Mike talks about getting the right people is where do we get the horses we got the ideas we've we know what needs to be done but where do we get the horse so these are the things that you think through in a business plan what kind of technology will you require and what will it cost to set it up and who's going to run it and operate it what kind of advertising publicity promotion will you require how much will it cost what kind of returns will you get so a business plan and there's many people I'm sure you have lots of business plan models they're quite common is a business plan forces you to think long term and to think slowly and you'll always make better business decisions if you think long term you think slowly the fourth area has to do with having a great marketing plan and a great marketing plan is what you talk about all the time but there's a rule in advertising I used to work for a large advertising agency and the rule is the fastest way to kill a product a bad product is to advertise it or to market it is to fight because if you market it what happens is more people use it more people use it and are angry about it then they tell more people and the product dies so the fastest way to kill a bad product is to promote it and many people they all know the way I can get my money back is I can sell it to people before they'd be enough people know how bad it is oh you have company we have the internet today everybody in the world can know how many troops appeared on the streets of critic crow man with the balaclava masks on their face and they know that in three second I was just in Russia where in Russia they control all the media and they tell people that they that they were attacking the Ukrainians backed by the CIA are behind all the problems in the Ukraine and the Russian poor Russian people just are are being sacrificed so I'm just sending in some of my troops to help protect our I said to my friend Sergei said Sergei it's nonsense not a word of what you're saying is true it's totally false the only people in the world who believe what you're saying or people within Russia have who have no access to news on the outside anyway that's it so I'm getting off-track my point is that marketing means how do you attract people to your product or service there's a difference between marketing and sales you know what it is imagine that I were to say to you at knit midday this group I say is anybody here hungry raise your hand all right that's marketing I'm interested in your product or service I'm interested in the product or service generally but anybody here like to save money make money lose weight be happy pick up girls you know whatever it happens to be then the second part is now I have a restaurant let me tell you why you should come to my restaurant to satisfy your hunger rather than to go to the competitors so those are the two it's the marketing is to attract people who raise their hand who are interested in the benefit that your product or service offers and selling the conversion is to get them to buy from you rather than from your competitors so there are very different functions you can't sell if you can't attract interested prospects so marketing is a very complex process and you guys talk about it all the time so you need a great marketing plan how can you tell if you have a great marketing plan answer is you have a steady stream of interested prospects who are calling you emailing you coming in your door sleeping on the street in front of your business each night to get to be the first ones to come in in the data number 5 is you need a great sales plan and a great sales plan of course is a sale that consistently and predictably converts customers or converts interested people into customers now here's the rule if you have a professional sales process and all 100% of all successful companies have a professional sales process if you speak to the salesperson working with an international company that has a branch in Warsaw and if you speak to the salesperson in Warsaw or the salesperson in Los Angeles or the salesperson in Johannesburg 100 percent of them use exactly the same sales process the first contact will be a telephone contact to offer you a benefit and to try to set up an appointment and the words will be word-for-word the reason this company did this was almost went broke because everybody was selling their own damn way they would say whatever fell out of their mouth when they ran across a prospect and they realize that without a sales process we have a great product which they do that's killing them so they systematize the sales process ourselves 1000% if it's been proven that if you go from random selling to a proven sales process and of course you have to debug it you increase your sales 500% with the same number of prospect I've seen people get their closing rates from one out of ten to nine out of ten by simply improving the sales process and so selling is really important that's one of the things we focus on now there's two more points that I want to talk about in terms of grace one is generate great numbers and this is one of the most important parts of business all business activities and results can be expressed in numerical form everything right down to the number of telephone rings or number of seconds it takes for a person phone to make connection with a person who can help them Jeff Bezos who as you see god best entrepreneur businessman of the year both Forbes and fortune they're obsessed with measuring every single activity and they look at the seconds the number of seconds that it takes when we first bought from Amazon they would advertise five to seven days ups today they offer one to two days max in cities like San Diego where they have warehouses you can order in the morning it's delivered in the afternoon books tapes horses clothes it's Zappos overnight they can deliver overnight because why is because they're obsessed with shortening the amount of time it takes to make customers happy and the shorter the time customers really value speed and they'll pay top dollar for someone who'll make them happy faster it's just a determinate so look at the numbers what and the question is one of the most important numbers in your business what we teach in our longer courses about thirty five numbers in any business some of them are unimportant some of them are extremely important and there's five to seven of those thirty-five numbers that are the a numbers and then there's one number that's the most important number of all and we call this or Jim Collins who wrote good to great calls it the economic denominator and when I started doing my coach programs with entrepreneurs one of the first things we taught was to identify your number what is the most important number in your business the number that most accurately predicts your success and your future and most people get that get it wrong the first three to five times what is your number what is your most important number the number that you just basically obsess with all the time and one one company went from front of a struggle written up in Entrepreneur Magazine went from struggling to bankruptcy and then a friend of his asked him what was your number what was the number you were focused on well we weren't focused on any number in particular we didn't hardly keep track so they were just selling by gosh and by golly and at the end of the day they were bust he had to go home and live with his mother the age of 26 so he said no you have to pick a number so he sat down and he said hmm he picked a number and it's called net contribution margin in other words exactly how many net dollars and cents do we make from each sale and then we compare those sales that's after a 100% of every expensive cost of customer acquisition and lead generation and delivery and everything else and then they compare those against the others and they re emphasized in other words net contribution margin at this year they'll hit a hundred million dollars in business and he's laughing he said change our whole life to finally figure out what our number was so a question I always ask me what is your number do you know do you know the most important number you know what most entrepreneurs say sales sales everybody knows adds as sales really what if you losing money on every sale then the more sales you make the faster you'll bust and you know that many companies are losing money on every sale because they don't they don't add in all the costs of the sale they leave out their own labor they leave out rent they leave out utilities they leave on delivery costs they leave out defects of about packaging the theft and so there's boy we're selling a lot yeah well how come you're losing more money every month you see these companies by the way that's announced they had 11 billion sales last year they lost three billion now you see them all the time it's how could you how would you lose three billion if you solve 11 billion you know why it's because they don't know the numbers and what they're doing is they're probably working harder and harder to sell more and more products of which they're losing more and more money and nobody sat down and done the attributable cost ok the last of the 7 and this is the one I love and this is the future by the way the front end of business the first bookend is having a great product or service to start with the last is to have a great customer service experience and I cannot tell you how important this is this is what Joel and I have worked on all of our lives make our customers so happy at the beginning and so happy with the product and happy afterwards it's the key to repeat business it's the key to rapid growth every successful company without exception is obsessed with taking good care of their customers once they get them and if they have a customer complaint the head of the company doesn't sleep at night they are so so upset about customer complaints they'll go personally visit them with the company president will phone an unhappy customer and talk to them because they consider customer happiness like Tony Hsieh to be the most important thing in the world what Tony says is that we're not in the shoe business we're in the customer happiness business we just happen to sell shoes and if we were selling something else we'd still be in the customer happiness business what was that worth to tony sole deferred his idea translated into a Zappos sold it for 1.2 billion dollars and took home 350 million not a bad idea make your customers happy does it work yes how often does it work a hundred percent of the time so you'll find that the very best companies the ones that you really like and want to go back to are the companies that make you feel happy they make you feel good as a result of having done business with them they take good care of you and as a result you go back over and over again and you bring your friends so those are the seven greats that we talked about here great leadership great product or service great marketing plan great sales plan great numbers great business plan and great customer service plan and if you have those here's the interesting thing is you missing one of them it's like dieting the seven digit number if you miss one of them you company go broke miss any one of them you get or get them wrong get the wrong answer or miss it completely then your company goes broke so now we know scientifically basically more and more of exactly what you have to do to build a high profit business and the wonderful thing is is all learn about you can learn any one of these skills anything I just explained to you is as simple as ditchwater all you have to do is just say ah and what is it you think again I could do that I could do more of that I could improve that we could do that so hope this has been helpful

Channel: Joe Polish

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Keywords: joe polish, brian tracy, genius network, 25K, 25K group, buainess, business coaching, marketing, coach, advice, presentation, how to, how to build a great business, i love marketing, Coaching (Industry), Business (TV Genre), Advice (Media Genre), Training, Success, Personal, Development, Attraction, Secret, Speaker, Inspiration, Motivation, Leadership, Life, Speaking, Management, Sales, Motivational, Entrepreneur, Positive, Seminar, Inspirational, Testimonial

Id: 4cs9zmGR7hk

Length: 60min 0sec (3600 seconds)

Published: Thu Jul 23 2015